Target established itself as the highest-earning division of the Dayton-Hudson Corporation in the 1970s; it began expanding the store nationwide in the 1980s and introduced new store formats under the Target brand in the 1990s. The company has found success as a cheap-chic player in the industry.[2] The parent company was renamed the Target Corporation in 2000 and divested itself of its last department store chains in 2004. It suffered from a highly publicized security breach of customer data and the failure of its short-lived Canadian subsidiary in the early 2010s but experienced revitalized success with its expansion in urban markets within the United States.

As of FY 2015, Target operates 1,792 locations throughout the United States. Their retail formats include the discount store Target, the hypermarket SuperTarget, and "flexible format" stores previously named CityTarget and TargetExpress before being consolidated under the Target branding. Target is often recognized for its emphasis on "the needs of its younger, image-conscious shoppers," whereas its rival Walmart more heavily relies on its strategy of "always low prices."[3]

History

Early history

The Westminster Presbyterian Church in downtown Minneapolis burned down during the Panic of 1893. Without insurance coverage to cover the financial loss, the congregation found itself unable to rebuild. The church appealed to parishioner George Dayton to purchase an empty corner lot adjacent to the original church in its possession; funds raised from the property's sale allowed the church to rebuild and Dayton constructed a six-story building on his newly purchased property.[4]

Dayton convinced the Reuben Simon Goodfellow Company to move its nearby Goodfellows department store into the newly erected building in 1902, although its owner retired altogether and sold his interest in the store to Dayton.[5] The store was renamed the Dayton Dry Goods Company in 1903, and was shortened to the Dayton Company in 1910.[4] The company made its first expansion with the acquisition of the Minneapolis-based jeweler J.B. Hudson & Son right before the Wall Street Crash of 1929; its jewelry store operated in a net loss during the Great Depression, but its department store weathered the economic crisis. Dayton died in 1938 and was succeeded by his son Nelson as the president of the $14 million business.[4] Nelson died in 1950 and was replaced by his own son Donald, who with his cousins replaced the Presbyterian guidelines set by his predecessors with a more secular approach. The company acquired the Lipman's department store company during the 1950s and operated it as a separate division.[6]

1960s and 1970s

John F. Geisse developed the concept of upscale discount retailing while working for the Dayton Company. Using his concepts, the company opened its first Target discount store at 1515 West County Road B in the Saint Paul suburb of Roseville, Minnesota; Douglas Dayton was its first president. The name "Target" originated from publicity director Stewart K. Widdess, and was intended to prevent consumers from associating the discount store with the department store. It opened three additional units in the first year, and reported its first gain in 1965 with sales reaching $39 million. Later that decade, B. Dalton Bookseller was formed as a subsidiary of the Dayton Company.[5] The parent company acquired the jewelers Shreve & Co. and J.E. Caldwell, the Pickwick Book Shops, and the electronics and appliances chain Lechmere.[4] It also went public with its first offering of common stock,[4] and built its first distribution center in Fridley, Minnesota.[7] In 1969, the Dayton Company itself merged with the Detroit-based J.L. Hudson Company, and together formed the Dayton-Hudson Corporation. The new company, at the time the 14th-largest retailer in the United States, consisted of Target and the department stores Dayton's, Diamond's, Hudson's, John A. Brown, and Lipman's.[4]

Target reached $200 million in sales while Dayton-Hudson acquired Team Electronics and the jewelers C.D. Peacock, Inc. and Jessop and Sons in the 1970s.[4][8] Target reported a decrease in profits in 1972, due to the rapid pace of expansion with the purchase and conversion of several former Arlan's department store locations. New management marked down merchandise to reduce its overstock and only opened one new location that year, Target consequently became Dayton-Hudson's top revenue producer in 1975. Dayton-Hudson was established as the seventh-largest general merchandise retailer in the United States with its acquisition of Mervyn's in 1978.[4]

1980s and 1990s

Dayton-Hudson sold Lipman's to Marshall Field's (which rebranded them as Frederick & Nelson) and acquired the discount store chain Ayr-Way in 1980,[6] and expanded into the West Coast market with the purchase and conversion of several FedMart stores in 1982.[9] It sold the Dayton-Hudson Jewelers subsidiary to Henry Birks & Sons of Montreal.[4] The company founded the Plums off-price clothing store with four locations in the Los Angeles area in 1983; the following year, it sold the chain to Ross Stores and sold the Diamond's and John A. Brown department stores to Dillard's.[10][11][12] Target was established as the dominant retailer in southern California after purchasing fifty Gemco stores in the state in 1986; that year, Dayton-Hudson sold B. Dalton Bookseller to Barnes & Noble.[5] The acquisition of several Gold Circle and Richway stores assisted its expansion into northwestern and southeastern United States.[9] Later that year, Dayton-Hudson sold Lechmere to a group of investors (including Berkshire Partners).[7]

In 1990, Dayton-Hudson acquired Marshall Field's and opened its first Target Greatland store in Apple Valley, Minnesota. It started the Everyday Hero clothing specialty store with two locations in Minneapolis in 1992,[9] although they were closed in 1997.[13] In 1993, the company created a chain of four closeout stores called Smarts for liquidating clearance merchandise, which were shuttered in 1996.[14] In 1995, the first SuperTarget hypermarket opened in Omaha, Nebraska and the Target Guest Card, the discount retail industry's first store credit card, was launched.[4]J. C. Penney offered to buy out Dayton-Hudson for $6.82 billion in 1996, an offer that most analysts had considered as insufficiently valuing the company.[4][15] Target remained the company's main area of growth while the department store subsidiaries underperformed.[16] The middle scale Mervyn's department store chain consisted of 300 units in 16 states, while the upscale department stores division operated 26 Marshall Field's, 22 Hudson's, and 19 Dayton's stores.[4] In an effort to turn the departments around, Mervyn's and Marshall Field's closed several locations.[4]

Dayton-Hudson acquired Greenspring Company's multi-catalog direct marketing unit Rivertown Trading Company and the apparel supplier Associated Merchandising Corporation in 1998.[17][18] In 1999, Dayton-Hudson acquired Fedco in order to expand its SuperTarget operation into southern California.[16][19] Revenue for Dayton-Hudson increased to $33.7 billion, and net income reached $1.14 billion, passing $1 billion for the first time and nearly tripling the 1996 profits of $463 million. On September 7, 1999, Dayton-Hudson launched Target.com website as an e-commerce site as part of its discount retail division.[20]

2000s and 2010s

In January 2000, Dayton-Hudson was renamed the Target Corporation; between 75 and 80 percent of Dayton-Hudson's sales and earnings were coming from Target, while the department stores were used to fuel its growth. It also separated its e-commerce operations from its retailing division, and combined it with Rivertown Trading into a standalone subsidiary called target.direct.[21] The following year, the Dayton's and Hudson's stores were rebranded under the Marshall Field's name.[4][16][22] The company sold Marshall Field's to May Department Stores in June 2004, and sold Mervyn's to an investment consortium including Sun Capital Partners, Cerberus Capital Management, and Lubert-Adler/Klaff and Partners, L.P that September. In 2005, Target began operation in Bangalore, India.[23] In 2006, Target completed construction of the Robert J. Ulrich Center in Embassy Golf Links in Bangalore, and Target planned to continue its expansion into India with the construction of additional office space at the Mysore Corporate Campus and successfully opened a branch at Mysore.[23][24]

On January 13, 2011, Target announced its first ever international expansion, into Canada, when it purchased the leaseholds for up to 220 stores of the Canadian sale chain Zellers, owned by the Hudson's Bay Company. The deal was announced to have been made for $1.8 billion. Target opened its first Canadian stores in March, 2013, and at its peak, Target Canada had 133 stores. However, the expansion into Canada was beset with problems, including supply chain issues that resulted in stores with aisles of empty shelves and higher-than-expected retail prices. Target Canada racked up losses of $2.1 billion in its short life, and the store's botched expansion was characterized by the Canadian and US media as a "spectacular failure",[25] "an unmitigated disaster",[26][27] and "a gold standard case study in what retailers should not do when they enter a new market."[28] On January 15, 2015, Target announced that all 133 of its Canadian outlets would be closed and liquidated by the end of 2015.[29] The last Target Canada stores closed on April 12, 2015, far ahead of the initial schedule.[27]

Store formats

Target

The first Targetdiscount store opened in Roseville, Minnesota on May 1, 1962.[30] Present-day properties are roughly 135,000 square feet (12,500m2), and sell general merchandise including hardlines and softlines.[31] While many Target stores follow a standard big-box architectural style,[32] the company has focused on "customizing each new store to ensure a locally-relevant experience [...] that best fit the surrounding neighborhood’s needs" since August 2006.[33] Initially, only SuperTarget locations operated Starbucks Coffee counters, although they were integrated into general merchandise stores through their expanded partnership beginning in 2003.[34] Several locations include Target Optical, Target Photo, and Target Pharmacy departments; the latter division was purchased by CVS Health in 2015, and began operating as stores-within-stores under the CVS Pharmacy and MinuteClinic mastheads in February 2016.[35]

Target introduced the "PFresh" store prototype in 2006, which expanded their grocery selection in general merchandise locations by an upwards of 200-percent. Newly constructed stores that follow the PFresh format are roughly 1,500 square feet (140m2) larger than properties without groceries, although retain the Target branding because their offerings are considerably more limited than SuperTarget. The company remodeled 109 stores accordingly in 2006, and renovated another 350 stores the following year.[36] The company's decision to close their garden centers opened floorspace for PFresh expansion and larger seasonal departments beginning in 2010.[37]

SuperTarget

The first Target Greatland location opened in Apple Valley, Minnesota in September 1990. They were about fifty-percent larger than traditional Target stores, and pioneered company standards including an increased number of checkout lanes and price scanners, larger aisles, expanded pharmacy and photography departments, and a food court. Target Greatland locations have since been converted to stores following the PFresh format beginning in 2009.[38]

The first SuperTargethypermarket opened in Omaha, Nebraska in 1995, and expanded upon the Target Greatland concept with the inclusion of a full grocery department.[30] The company expanded their grocery assortment in 2003, and adopted the modified tagline "Eat Well. Pay Less." (in reference to their tagline "Expect More. Pay Less.") in 2004.[30][39] In the early 2000s, 43 locations (of nearly 100) featured E-Trade trading stations, although they were all closed by June 2003 after E-Trade determined that "we were not able to make it into a profitable distribution channel."[40]

When comparing itself with rival Walmart Supercenter hypermarkets, then-chief executive Gregg Steinhafel opined that Walmart operates like "a grocer that happens to also sell general merchandise," where in contrast its less aggressive expansion of SuperTarget stores is indicative of their position that the grocery industry as a "high-impact, low-cost" side project.[39] The company operates 239 SuperTarget locations as of September 2015;[41] they each encompass an estimate of 174,000 square feet (16,200m2).[42]

Flexible format Target

While typical Target locations are approximately 135,000 square feet (12,500m2), the majority of "flexible format" CityTarget stores are roughly 80,000 square feet (7,400m2). The first stores were opened in July 2012, in Chicago, Los Angeles, and Seattle;[31] the 160,000 square feet (15,000m2) location in Boston is the largest CityTarget, and opened in July 2015.[43]TargetExpress stores hover around 14,000 square feet (1,300m2) to 21,000 square feet (2,000m2); the first opened in Dinkytown near the University of Minnesota in July 2014.[44] Products in these flexible format properties are typically sold in smaller packages geared towards customers using public transportation; locations built in college communities often carry an extended home department of apartment and dormitory furnishings.[45] In August 2015, Target announced that it would rename its nine CityTarget and five TargetExpress stores as Target beginning that October, deciding that "Big or small, our stores have one thing in common: They're all Target."[43] The first flexible format stores under the unified naming scheme opened later that month in Chicago, Rosslyn, San Diego, and San Francisco.[46] The company opened a 45,000 square foot store in the Tribeca neighborhood of New York in October 2016. Three other similar sized stores will open in Philadelphia, Cupertino and the area around Penn State University in October 2016.[2]

Nearly all of its planned openings through 2018 are small formats, which is less than 50,000 square feet.[2] The goal of these smaller format stores is to win over the business of millennial customers. The nearly 30 new locations will be situated in college towns or densely populated areas.[2]

Subsidiaries

Financial and Retail Services

Financial and Retail Services (FRS) formerly Target Financial Services (TFS): issues Target's credit cards, known as the Target REDcard (formerly the Target Guest Card), issued through Target National Bank (formerly Retailers National Bank) for consumers and through Target Bank for businesses. Target Financial Services also oversees GiftCard balances. Target launched its PIN-x debit card, the Target Check Card, which was later re-branded the Target Debit Card. The Target Debit Card withdraws funds from the customer's existing checking account, and allows for up to $40 "cash back." The debit card allows customers to save five percent of each purchase, as well as designate a school for Target's Take Charge of Education program, and accumulate pharmacy rewards.

Target Sourcing Services

Target Sourcing Services (TSS): This global sourcing organization locates merchandise from around the world for Target and helps import the merchandise to the United States. Such merchandise include garments, furniture, bedding, and towels. TSS has 27 full-service offices, 48 quality-control offices, and seven concessionaires located throughout the world. TSS employs 1,200 people. Its engineers are responsible for evaluating the factories that do business with Target Corporation for quality, as well as labor rights and transshipment issues.[47] TSS was acquired by Target Corporation in 1998, was founded in 1916 as the Associated Merchandising Corporation, and was previously owned by the clients it served. Target Sourcing Services ceased operations in its department store group, the division of the former Associated Merchandising Corporation that acted as a buying office for Saks, Inc., Bloomingdale's, Stage Stores Inc., T.J.Maxx, and Marshalls.[18]

Private label brands

Target Brands: owns and oversees the company's private label products, including the grocery brands Archer Farms, Market Pantry, and Simply Balanced; Sutton & Dodge, their premium meat line; Room Essentials, their home goods line; and Threshold, their premium furniture line. Target issued a re-launch of the Target brand as "up&up" to include an expanded product selection and a new design. The up & up brand offers essential commodities including household, health care, beauty, baby, and personal care products. The brand claims to offer products of equal quality to national brands at a fraction of the cost, averaging a savings of 30 percent.
[48] As of September 2009, up & up carries over 800 product offerings across 40 categories.[49] Other private labels include two recently released brands, Pillowfort, their children's line of bedding and Cat and Jack, their children's line of apparel and accessories. The new brands was launched on July of 2016, during Back to School sales. After the launch, the clothing and bedding brand made a big hit and was successful. Target executives claim that the new brands increased sales by $1 billion dollars and increased 15% in revenue, only during their first year.[50] In addition, Bullseye Dog is a mascot, and the Bullseye Design and 'Target' are registered trademarks of Target Brands.

Website

Target.com: owns and oversees the company's e-commerce initiatives, such as the Target.com domain. Founded in early 2000 as target.direct, it was formed by separating the company's existing e-commerce operations from its retailing division, and combining it with its Rivertown Trading direct marketing unit into a stand-alone subsidiary.[21] In 2002, target.direct and Amazon.com's subsidiary Amazon Enterprise Solutions created a partnership in which Amazon.com would provide order fulfillment and guest services for Target.com in exchange for fixed and variable fees. After the company sold Marshall Field's and Mervyn's in 2004, target.direct became Target.com. The domain target.com attracted at least 288 million visitors annually by 2008, according to a Compete.com survey.[51] In August 2009, Target announced that they would build and manage a new Target.com platform, independent of Amazon.com. This new platform was to launch in 2011, in advance of the holiday season. Prior to the announcement, Target and Amazon had extended their partnership until 2011.[52] In January 2010, Target announced their vendor partners for the re-platforming project. These partners include Sapient, IBM, Oracle, Endeca, Autonomy, Sterling Commerce and Huge, among others.[53] The re-platformed Target.com officially launched on August 23, 2011, effectively ending the partnership with Amazon.com.[54]

Distribution centers

As of May 2016, Target Corporation operates 38 distribution centers across the United States.[55] Target opened three new distribution centers in 2006 (Rialto, California, DeKalb, Illinois) and one in 2009 (Newton, North Carolina) to support the growth of its stores. With the exception of vendor supplied items, such as greeting cards and soda, these distribution centers ship items directly to Target stores. Also, unlike Walmart, Target's grocery selection does not come from their own distribution centers, but from the companies with whom Target has partnered.[5]

The retail chain's first distribution center opened in Fridley, Minnesota, in 1969. It included a computerized distribution system and was known as the Northern Distribution Center. During this time, the chain consisted of seventeen stores after having expanded into Oklahoma and Texas.[56]

On August 9, 2004, Target announced to their suppliers that they were going to perform a trial on the effects of radio-frequency identification on the efficiency of supply chain management in the Dallas–Fort Worth metroplex. This trial involved one Target distribution center and ten nearby Target stores. Here, RFID tags would be placed on the bar codes of pallets and cartons to track the goods from the suppliers to the distribution center, and from the distribution center to the stores.[57] As of 2009, RFID had been phased out of the Dallas–Fort Worth stores.

On January 27, 2009, Target announced the closing of its distribution center in Maumelle, Arkansas, the second-oldest in the company. The reason cited was the need to ensure that Target remains competitive in the long-term.[58]

SuperTarget and PFresh stores require fresh produce, refrigerated and frozen items. Food distribution centers owned by SuperValu have been utilized by Target for many years. In October 2003, SuperValu's facility in Phoenix, Arizona, was converted to serve Target exclusively.[59] The same change was implemented at the SuperValu center in Fort Worth, Texas.[60] A new distribution center was constructed by Target in Lake City, Florida, to serve the Southeast, but it is operated by SuperValu.[59] A fourth center in Cedar Falls, Iowa, opened in 2009 and is unique in that it is located adjacent to a standard Target Distribution Center, each utilizing the same dispatch office.[60] Other warehouses owned by SuperValu are still used in other regions, but Target plans to replace those over the next few years.[59] In Colorado, stores are serviced through FreshPack Produce Inc. of Denver.[5] In the mid-Atlantic region/Philadelphia market, C&S Wholesale Grocers services the fresh produce, meat, dairy, bakery, & frozen needs to "PFresh" stores.

Corporate affairs

Headquarters

Target Plaza South, a portion of the Target Corporation headquarters complex in downtown Minneapolis; the building originally featured the Target Light System, created by using 3M light pipes[61] but was replaced by more energy-efficient LEDs in 2011.[62]

Target Corporation has its headquarters on Nicollet Mall in Minneapolis,[63] near the site of the original Goodfellows store. The complex includes Target Plaza North and Target Plaza South. Ryan Companies developed the complex, and Ellerbe Becket served as the architect. Target had the approximately $260-million complex developed to provide one location of office space for 6,000 employees. The 14-story Target Plaza North has 600,000 square feet (56,000m2) of office and retail space, while the 32-story Target Plaza South has 1,250,000 square feet (116,000m2) of space.[64]

Brian Cornell is the CEO of Target Corporation. In January 2016 Cornell began making home visits in an effort to understand better the needs and desires of his customers.[65] In January 2016, Target fired Tina Tyler from her job as chief stores officer. She was replaced with long-time employee Janna Potts.[66]

Diversity

The company states that "individuality may include a wide spectrum of attributes such as personal style, age, race, gender, ethnicity, sexual orientation, language, physical ability, religion, family, citizenship status, socio-economic circumstances, education, and life experiences."[67]

The Target employee diversity initiative is called "All Together Target".[68] It specifically seeks to work with vendors and contractors that are owned by minorities or women.[69]

In February 2012 the company extended the team member discount to same-sex partners of employees. It had received a 100 on the Human Rights Campaign Corporate Equality Index Score, prior to donating funds to Minnesota Forward.[70] In addition, Target Corporation was named one of the "100 Best Companies for Working Mothers" in 2004 by Working Mother.[71]

The National Association for the Advancement of Colored People has repeatedly given Target failing grades on its annual Economic Reciprocity Initiative report card, a measure of the company's "commitment to the African-American citizenry". In 2003 and 2005, the NAACP has rated Target an "F" on this report; in 2004, Target was rated a "D-".[72][73][74] In 2006, when Target was asked why it didn't participate in the survey again,[75] a representative explained, "Target views diversity as being inclusive of all people from all different backgrounds, not just one group."[76]

In February 2006, the National Federation of the Blind (NFB) filed a class action discrimination lawsuit in Northern California's Alameda County Superior Court, claiming that Target's commercial website contains "thousands of access barriers that make it difficult, if not impossible, for blind customers to use."[77] Target Corporation settled the lawsuit in October 2008, paying $6million and agreeing to work with the NFB over the next three years improving the usability of the Target.com site.[78]
August 24, 2009, the United States Equal Employment Opportunity Commission (EEOC) filed a discrimination lawsuit against Target Corporation for unlawfully denying reasonable accommodation to an employee with multiple disability-based impairments and substantially reducing his work hours due to the medical conditions.[79] According to the claims in the EEOC press release, Target's actions violated Title I of the Americans With Disabilities Act (ADA) and Title I of the Civil Rights Act of 1991.[80]

Philanthropy

Target Corporation is consistently ranked as one of the most philanthropic companies in the US. It ranked No. 22 in Fortune magazine's "World's Most Admired Companies" for 2010, largely in part to the donation efforts of the company as a whole.[81] According to a November 2005 Forbes article, it ranked as the highest cash-giving company in America in percentage of income given (2.1%).[82] Target donates around 5 percent of its pre-tax operating profit; it gives over $3million a week (up from $2million in years prior) to the communities in which it operates. It also gives a percentage of charges from its Target Visa to schools designated by the cardholders. To date, Target has given over $150million to schools across the United States through this program.

Further evidence of Target's philanthropy can be found in the Target House complex in Memphis, Tennessee, a long-term housing solution for families of patients at the city's St. Jude Children's Research Hospital. The corporation led the way with more than $27million in donations, which made available 96 fully furnished apartments for families needing to stay at St. Jude over 90 days.

Target has a no-solicitation rule at its properties, as it seeks to provide a "distraction-free shopping experience for its guests." Exemptions to this policy were previously made for the Salvation Army red kettles and bell-ringers outside Target stores during the holidays through Christmas. In 2004, however, Target asked the organization to explore alternate methods to partner with Target. Target donates to local Salvation Army chapters through its grant program and annually to the United Way of America (the Salvation Army is a member of the United Way coalition).

In 2005, Target and the Salvation Army[83] created a joint effort called "The Target/Salvation Army Wish List", where online shoppers could donate goods to the organization for hurricane victims by buying them directly from Target.com between November 25, 2005, and January 25, 2006. In 2006, they created another joint effort called "The Target/Salvation Army Angel Giving Tree",[84] which is an online version of the Salvation Army's Angel Tree program;[85] in addition to donating proceeds made from the sales of limited edition Harvey Lewis angel ornaments within Target's stores. During the Thanksgiving holiday of 2006, Target and the Salvation Army partnered with magician David Blaine to send several families on a shopping spree the morning of Black Friday. The challenge held that if Blaine could successfully work his way out of a spinning gyroscope by the morning of Black Friday, then several families would receive $500 shopping certificates. The challenge was completed successfully by Blaine.[86]

During disasters, Target has been a major benefactor for relief efforts. Target provided monetary and product donations during the September 11 attacks; it also donated money for relief efforts for the 2004 tsunami in South Asia and donated $1.5million (US) to the American Red Cross in the aftermath of Hurricane Katrina in 2005. It also allowed its store properties in the affected area to be used as command centers for relief organizations and donated supplies such as water and bug spray.

Target will often donate its unused, returned or seasonal merchandise (particularly clothing) to Goodwill Industries.

Environmental record

In 2007, Target Corporation agreed to reduce their sales on all materials containing polyvinyl chloride (PVC).[87] Testers found toxic lead and phthalates and large amounts of PVC in toys, lunchboxes, baby bibs, jewelry, garden hoses, mini blinds, Christmas trees, and electronics.[87] Several studies have shown that chemicals in vinyl chloride can cause serious health problems for children and adults.[87] The University of Illinois Medical Center in Chicago states that people who use products containing PVC can become exposed with harmful toxic phthalates and lead, which eventually can become a big contributor with dioxins.[87] Lois Gibbs, executive director of the Center for Health, Environment and Justice, stated, "Target is doing the right thing by moving away from PVC and switching to safer alternatives."[87] Other companies reducing the PVC on their shelves include Walmart, Microsoft, Johnson & Johnson, Nike, and Apple.[87] Target stores have been taking environmental measures by reusing materials within their stores and recycling products such as broken hangers, cardboard, and rechargeable batteries.[88] Target is beginning to reduce energy use with energy-efficient storefronts, and reducing waste with recycling programs.[89] All Target stores in the United States use plastic carts with metal frames. In mid-2006, Target took it a step further when it began introducing a newer cart design made entirely of plastic. It also uses the same design in its hand-use baskets.[90]

Target released a 13-page report in 2007 that outlined their current and future plans for becoming more earth-friendly according to LEED. Such efforts include installing sand filtration systems for the stores' wastewater. Recycling programs will be aimed at garment hangers, corrugated cardboard, electronics, shopping carts, shrink wrap, construction wastes, carpeting and ceiling tiles and roofing materials. All stores in Oklahoma will be partnered with Oklahoma Gas & Electric to exclusively use wind power for all Target stores in order to reduce greenhouse gas emissions. Stores nationwide use only LED and fluorescent lights and low-flow restrooms that reduce waste water by 30%. Some Target stores are installing roof gardens or green roofs, which absorb storm water and cut down on surface runoff, mitigate temperature fluctuations and provide habitats for birds. There are currently four green-roof Target stores in Chicago.

Target carries over 700 organic and alternative products from brands such as Archer Farms, Burt's Bees, and Method Products. They also sell clothes made from organic cotton, non-toxic cleaners, low-energy lighting and electronics, non-toxic and non-animal tested cosmetics, and furniture made from recycled materials. As of June 2007, Target has been offering reusable shopping bags as an alternative to disposable plastic bags. Target gift cards are made from corn-based resins. All of the stores' packaging is done with a modified paperboard/clamshell option and has goals for phasing out plastic wrap completely.[91]

In collaboration with MBH Architects, Target's first "green" building was a 100,000+ square foot Target store built in 1995 in Fullerton, California. It was a part of the EPA Energy Star Showcase for its use of skylights that cut the original energy consumption by 24% with a 5-year payback.[92] Target and MBH Architects were awarded the "Green Lights Partner/Ally of the Year Award".[93]

Target is the only national retailer employing a Garment Hanger reuse program, which keeps millions of pounds of metal and plastic out of landfills. In 2007, this program prevented 434 million hangers from entering landfills.

On June 15, 2009, the California Attorney General and 20 California District Attorneys filed a lawsuit in Alameda County alleging that Target stores across the state have been illegally dumping hazardous wastes in landfills.[94]

On October 1, 2009, Target Corporation agreed to pay a $600,000 civil penalty for importing and selling a variety of toys with lead paint levels that were higher than is legally allowed. The Consumer Products Safety Commission alleged that "Target knowingly imported and sold the illegal Chinese-made toys between May 2006 and August 2007."[95] A similar problem occurred a few months later in February 2010, when Target pulled Valentine's Day "message bears" from its shelves at the request of the California attorney general's office. The bears, which were manufactured in China, contained more lead than is permissible under federal law for children under 12.[96]

A class action suit was filed in 2014 in the U.S. District Court for the Northern District of Ohio, on behalf of consumers in Ohio that purchased Target-brand wet wipes. The lawsuit filed against Target Corporation alleges the retailer mislead consumers by marking the packaging on its up & up® brand wipes as flushable and safe for sewer and septic systems. The lawsuit also alleges that so-called flushable wipes are a public health hazard because they are alleged to clog pumps at municipal waste-treatment facilities.[97]

Customer privacy

In December 2013, a data breach of Target's systems affected up to 110 million customers.[98][99] Compromised customer information included names, phone numbers, email and mailing addresses.[100] In March 2015, Target reached a class-action settlement with affected consumers for $10 million (plus class-action attorney fees).[101] In May 2016, Target settled with affected banks and credit unions for $39 million (plus class-action attorney fees), of which $19 million would be disbursed by a MasterCard program.[102]

Corporate identity

Logo

97% of American consumers recognize the Target Bullseye logo.

Original Target logo (1962–67)

Second Target logo (1975-2004) "primary", (1975-present) "secondary"

Third Target logo (1968–present)

Fourth Target logo (2004–present)

Target Greatland logo (1990–2006)

Original SuperTarget logo (1995–2005)

Second SuperTarget logo (2006–present)

CityTarget logo (2012–15)

TargetExpress logo (2014–15)

Differentiation from competitors

Target Corporation competes directly against other discount retailers, mainly Kmart and Walmart. Since its founding, it has intended to differentiate its stores from its competitors by offering what it believes is more upscale, trend-forward merchandise at lower costs, rather than the traditional concept of focusing on low-priced goods. Douglas J. Dayton, one of the Dayton brothers, explained John Geisse's concept:

“

"We will offer high-quality merchandise at low margins, because we are cutting expenses. We would much rather do this than trumpet dramatic price cuts on cheap merchandise."[56]

”

As a result, Target stores tend to attract younger customers than Walmart, among other competitors. The median Target shopper is 41, the youngest of all major discount retailers that Target competes directly against. The median household income of Target's customer base is roughly $63,000. Roughly 76% of Target customers are female, and more than 45% have children at home. About 80% have attended college and 48% have completed college.[103][104]

In October 2008, Target announced plans to fight the perception that their products are more expensive than those of other discount retailers. It planned to add perishables to their inventory, cut back on discretionary items, and spend three-quarters of their marketing budget on advertising that emphasizes value and includes actual prices of items featured in ads. Target also planned to slow its expansion from about 100 stores a year down to 70 stores a year.[105][106][107]

Target stores do not sell firearms. In the early 1990s, they ceased sales of toy guns that looked realistic and limited its toy gun selection to ones that were brightly colored and oddly shaped. In 2014, Target also "respectfully" asked their guests to leave any firearms at home when visiting the store.[109] They do not sell tobacco products and have not sold cigarettes since 1996.[110] This is a key point of differentiation with Target's chief competitor Walmart, which offers firearms and tobacco at many stores.

Targét

Some people jokingly give Target the pseudo-French pronunciation /tɑːrˈʒeɪ/tar-ZHAY, as though it were an upscale boutique. This trend is incorrectly believed to have been started by Oprah Winfrey, when she used the French pronunciation to refer to the store on her television show, but has actually been traced back to 1962, the year the first Target store opened. Target once sold a line of shoes called "Miss Targé"[111] this was reinforced by a 1980s television advertisement starring Didi Conn. This pronunciation has also led some people to incorrectly believe that the company is French-owned.[5] In recognition of the nickname's popularity and cachet, Target Corporation licensed its name and logo to Brand Central LLC in 2006, complete with accent over the letter "E", which, however, would be inaccurate and unnecessary according to French spelling rules, for a new line of clothing intended for more upscale fashion customers. The line, "Targét Couture", was originally sold at Los Angeles-based store Intuition, which deals with high-end brands.[112][113]

Nomenclature

Target uses a practice that was derived in 1989 from The Walt Disney Company[5] by calling its customers "Guests", its employees "Team Members", and its supervisors "Team Leaders". Also, managers are known as "Executive Team Leaders (ETLs)" and the Store Manager is known as the "Store Team Leader (STL)". Further up the "chain of command" are "District Team Leaders (DTL)", "Group Team Leaders (GTL)", Regional Team Leaders (RTL) (sometimes also Regional Vice President), and finally corporate-level executives.

Target, after hiring architect Michael Graves to design the scaffolding used to renovate the Washington Monument and contributing $6million USD to the restoration plan, introduced its first designer line of products in 1999, the Michael Graves Collection of housewares and home decor products.[114]Walmart and Kmart have followed Target's lead by signing exclusive designers to their stores as well. Target also partners with well-established national brands to create exclusive collections for its stores.[114]

In 2005, Target introduced a major revision of prescription bottles, which it calls the ClearRx system. The redesigned bottles are color-coded, flattened-out and turned upside down, providing more room for the label. This system was based on the patent[115] by student Deborah Adler and was named one of TIME's "Most Amazing Inventions of 2005".[116]

In 2005, IFC began a partnership with Target to promote a selection of independent films, both in Target stores and on IFC Monday nights at 9:00pm Eastern. Originally titled IFC Cinema Red, the promotion was rebranded on air as The Spotlight in 2007. The in-store headers refer to the selected titles as IFC Indies – Independent films chosen for Target by the Independent Film Channel.[118]

In 2016, Target began to enforce gender neutrality in its marketing of toys, and no longer explicitly listed specific toys as being for "boys" or "girls". This practice was expanded with the February 2016 launch of a new children's decor line, Pillowfort, which will replace its Circo brand and feature more gender-neutral designs and color schemes.[119]

Gift cards

The Target GiftCard is the retailing division's stored-value card or gift card. Target sells more gift cards than any other retailer in the United States and is one of the top sellers, by dollars and units, in the world.[120] The unique designs of their cards contribute to their higher sales, as well as Target's policy of no expiration dates or service fees.[121] Past and current designs include lenticular, "scratch and sniff" (such as peppermint during the Christmas season), glow in the dark, LED light-up, a gift card on the side of a bubble blower, a gift card that can function as a CD-ROM, and even a giftcard that allows the sender to record a voice message. A current environmentally friendly giftcard is made from bioplastic manufactured from corn.[122] Target rolled out a new MP3 player giftcard for the 2006 holiday season. It holds 12 songs and must be purchased with an initial value of at least $50.

Beginning in January 2010, Target Stores rolled out Mobile GiftCards, through which one can produce a GiftCard barcode on any web-capable cell phone. This data matrix barcode can be scanned at a Target POS like any physical card barcode, and balances can be stored, retrieved, and gifted with the convenience of a cell phone.

Some of these unique design ideas are patented, and these patents are assigned to the Target Brands subsidiary. For example, some such Target GiftCard designs feature a wooden front side. On May 24, 2005, the United States Patent and Trademark Office granted U.S. patent D505,450 for the "ornamental design for a credit or stored value card with wood layer" to inventors Amy L. Lauer and John D. Mayhew.[123] U.S. patent 7004398, for the "stored-value card assembly including a stored-value card, an edible product, and a wrapper", was granted to Michael R. Francis and Barry C. Brooks on February 28, 2006.[124] Both patents have been assigned by their inventors to Target Brands, Inc.

Target GiftCards are also collectors items. Some of the first gift cards issued are valued at over $300 (even though the card doesn't have any money on it). Every year Target introduces new Holiday GiftCards. In 2007, Target's Holiday GiftCards featured a wind-up flashlight, a musical gift card, a gift card that lights up, and a scented gift card.

Criticism and controversy

Animal welfare concerns

In 2011, Mercy for Animals, a non-profit organization dedicated to preventing cruelty to farmed animals and promoting compassionate food choices and policies, uncovered animal abuse at a Target egg supplier.[128] Hidden-camera footage shot at Sparboe Farms—a significant egg supplier to Hy-Vee, McDonald's, Sam's Club, SuperValu, and Target—revealed hens crammed into filthy wire cages, unable to fully stretch their wings or engage in most other natural behaviors. The investigator documented workers burning off chicks' beaks, without painkillers, torturing animals, and throwing live birds into plastic bags and leaving them to suffocate. Dead hens were left to rot alongside birds that were still laying eggs for human consumption.

"Bathroom policy" and boycott

In April 2016, Target announced on its website that it would allow transgender customers and employees access to use restrooms and changing areas that correspond with the gender with which they identify, except where local laws require otherwise; the New York Times called this "the most prominent position taken by a national retailer".[136] In response, the American Family Association (AFA)[137] launched a nationwide boycott; by April 28, about one million people had signed the AFA's petition.[138] Target saw a "significant" but not "catastrophic" drop, from 42% to 38%, in consumer polls around the time the policy was announced.[139] In mid-May, CEO Cornell said the boycott impacted "just a handful of stores across the country".[140] Some observers, such as Fortune's Phil Wahba, believe that Target's bathroom policy may have caused part of Target's drop in shopper traffic during the second quarter of 2016. On August 17 Target announced it would add a third private single-stall locking bathrooms at many of its stores.[141]

Major sponsorships

Events

Target Corporation is a major sponsor of the annual Minneapolis Aquatennial, where it hosts the Target Fireworks Show, the largest annual fireworks show west of the Mississippi River and the fourth largest annual fireworks show in the United States.[142]

Target was a sponsor of the 2006–2007 New Year's Times Square Ball Drop, and had its logo placed on the confetti dropped during the celebrations as well as specially designed "2007" glasses.[143]

Target sponsors the Museum of Modern Art in New York City and hosts Target Free Friday Nights, providing to all visitors free admission to the museum during Fridays after 4pm

Sports

Chip Ganassi Racing

Target is a long-time sponsor of the IndyCar and NASCAR racing teams of Chip Ganassi Racing. Target's relationship with Ganassi in IndyCar go back to 1990, when it began sponsoring Eddie Cheever. Some of their most famous drivers in the 1990s include Michael Andretti, Bryan Herta, and Arie Luyendyk. In the late 1990s, Target Chip Ganassi Racing had a four-year run of winning championships in CART, winning 1996 with Jimmy Vasser, 1997 and 1998 with Alex Zanardi, and 1999 with Juan Pablo Montoya. Ganassi won their first Indianapolis 500 in 2000. The team moved full-time into the rival Indy Racing League in 2003, and won in its first year of full-time competition, with Scott Dixon. Dixon won the championship again in 2008. The 2009 season marked the 20th anniversary of the Target race program. Franchitti won his second career IndyCar championship, and with Scott Dixon finishing second, gave Target a one-two sweep in the IndyCar Series. Dixon and Franchitti won 10 of 17 races (Dixon-5, Franchitti-5) and tied the team record from 1998 where Alex Zanardi and Jimmy Vasser combined to win 10 in the 19-race 1998 CART season. In 2010, Franchitti won the Indianapolis 500. He also won the series championship for the Target team, by five points over second-place finisher Will Power.